The Union Ministry of Housing and Urban Poverty Alleviation has proposed a credit risk guarantee fund scheme (CRGFS) under the Rajiv Awas Yojana with a corpus of Rs.1,000 crore to ensure flow of funds into the housing sector for the weaker sections of society.

The proposal includes the setting up of a credit risk guarantee fund trust for low-income housing to oversee the administration of the scheme.


The salient features of the CRGFS include guarantee support by the Union Government to collateral-free, third-party, guarantee-free housing loans up to Rs.5 lakh extended by lending institutions for low-income group housing.

The CRGFS will cover loans not exceeding Rs.5 lakh taken for house repairs and improvement, construction, acquisition, and purchase of new or second-hand dwelling units, says the website of the Ministry.


The guarantee cover available under the scheme is proposed to be to the extent of 90 per cent of the sanctioned housing loan amount for sums up to Rs.2 lakh and 85 per cent for Rs.2 lakh to Rs.5 lakh.

Draft Bill

The Ministry has come out with a draft Model Property Rights to Slum Dwellers Act, 2011, the website says.

The basic concept is to work towards a slum-free India and assigning property rights to slum dwellers under the Rajiv Awas Yojana, which proposes decisive action for inclusive urban development that acknowledges the presence of the poor in cities, recognises their contribution as essential to the cities' functioning, and redresses the fundamental reasons for inequality that ties them down to poverty.

The Ministry has called conferment of property titles on the slum-dwellers as the best investment in democracy by creating for the household due space within the formal system, and thereby a vested interest in peace and legal order.


Through conferment of titles, the slum-dwellers are brought into the formal system, allowing them to participate in the process of growth and development.

It will give them the right to mortgage and make them part of the formal economy.

Inclusive growth

The Bill expects to facilitate inclusive growth and create slum-free cities, and every landless person living in a slum in any urban area as on June 4, 2009 will be entitled to a dwelling space at affordable rates.

Titles will be conferred either in the name of the woman head of the family or in the joint name of a couple.

The dwelling units so provided cannot be transferred but can be mortgaged to raise housing loans.


The basic concept is to work towards a slum-free India